MOTION FOR RECONSIDERATION GRANTED; DECISION AFFIRMED ON RECONSIDERATION: June 11, 1993 GSBCA 10526-P-R LAPTOPS, ETC., INC., Protester, v. DEPARTMENT OF TRANSPORTATION, Respondent. Michael D. Hays and Steven C. Crampton of Dow, Lohnes & Albertson, Washington, DC, counsel for Protester. Nathan Tash and Sybil Horowitz, Procurement Legal Division, Federal Aviation Administration, Department of Transportation, Washington, DC, counsel for Respondent. Before Board Judges LaBELLA, HYATT, and WILLIAMS. WILLIAMS, Board Judge. Protester, LAPTOPS, ETC., INC. (LAPTOPS), has requested reconsideration of our decision of March 30, 1990, in which we dismissed LAPTOPS' protest as untimely. LAPTOPS' protest followed our decision granting two prior protests against an award by the Federal Aviation Administration (FAA) to International Data Products Corporation (IDP). Information Systems and Networks Corp., GSBCA 10228-P, et al., 90-1 BCA 22,496, 1989 BPD 364, dismissed on reconsideration, Rocky Mountain Trading Company -- Systems Division, GSBCA 10235-P-R, 90-2 BCA 22,739, 1990 BPD 52. In these protests, all protesters had challenged the rejection of their bids as nonresponsive and Rocky Mountain Trading Company -- Systems Division (RMTC) and University Systems, Inc. (USI) had claimed that FAA's evaluation of all bids was arbitrary and capricious. Id. Although LAPTOPS received notice of these earlier protests and had itself submitted several bids in this procurement, it electednot to intervene in thoseprotests or file its own protest. 2 In granting the protests, we concluded that FAA's evaluation of IDP's bid was arbitrary and capricious in that IDP's printer failed a mandatory requirement of the solicitation during a live test demonstration (LTD) and FAA improperly waived that requirement in awarding to IDP. Subsequently, on reconsideration, we vacated our decision, finding that all protesters lacked standing. LAPTOPS then filed a protest challenging FAA's decision to proceed with the award to IDP. We dismissed LAPTOPS' protest as untimely concluding that LAPTOPS knew or should have known its basis of protest at the time of award. We grant reconsideration to consider LAPTOPS' contention, supported by new evidence, that it did not know and could not have known its basis of protest at the time of award.[foot #] 1 Based upon such evidence, we affirm our earlier decision to dismiss LAPTOPS' protest as untimely filed, but articulate a different rationale. We accept LAPTOPS' allegation that IDP's failure to meet a mandatory solicitation requirement was not disclosed until discovery in the initial protests and that LAPTOPS did not actually know of such failure until the Board issued its decision on reconsideration. However, because LAPTOPS should have known of IDP's failure at the LTD as a result of discovery in the earlier protests, the instant protest, filed months after such discovery, is untimely. The fact that LAPTOPS neither filed its own protest, nor intervened in the earlier protest, nor otherwise took steps to ascertain the facts disclosed during discovery in the earlier protests, is a situation of its own making. Stated simply, LAPTOPS failed to pursue its protest with due diligence. Background In solicitation number DTFA01-89-B-06588, FAA sought sealed bids for desktop and laptop computers and dot matrix printers to be used by FAA's maintenance and diagnostic technicians. The invitation for bids (IFB) contained a mandatory requirement that the dot matrix printers respond to control characters and escape sequences either in the same manner as the IBM Proprinter XL, or provide a mode that emulates it. Additionally, the IFB contained a provision requiring vendors to perform an LTD to verify that the equipment met FAA requirements. FAA made the original award to IDP on August 21, 1989. The award was the subject of three protests. ISN, 90-1 BCA 22,496, 1989 BPD 364. Although LAPTOPS received notice of the protests and had submitted three alternate bids on the procurement, one of which was next in line to receive the award, it elected not to ----------- FOOTNOTE BEGINS --------- [foot #] 1 We consider facts set forth in affidavits which were not part of the record previously. ----------- FOOTNOTE ENDS ----------- 3 intervene in the protests. During extensive discovery in the Information Systems and Networks, Inc. (ISN), RMTC, and USI protests, FAA disclosed that IDP's printer had failed to perform a required test and that FAA had waived this failure. Specifically, in response to an interrogatory, served prior to the merits hearing on October 12 through 17, 1989, FAA stated: Whereas the offered printer (a Panasonic KX-P1595) did in fact properly print 229 characters, it did not emulate the IBM proprinter XL escape sequence and control characters, when all characters were sent. Since this particular feature was of no value as far as what was essential to support the . . . program, the requirement was waived. . . . Respondent's Answer to ISN's Interrogatory No. 12; Protest File, GSBCA 10526-P, LAPTOPS' Rule 4(b) Supplement, Tab B, 12. Further, the LTD report disclosed in the protest file, testimony at the hearing, and the deposition of a member of the technical evaluation team indicated that IDP's printer had failed this emulation requirement; all of these had been disclosed in the protests in or before October 1989. ISN, 90-1 BCA at 112,936-37, 1989 BPD 364, at 23-24.[foot #] 2 We granted the protests of RMTC and USI in part, finding FAA's evaluation arbitrary and capricious because IDP's bid had been deemed responsive even though its printer failed to emulate the IBM Proprinter XL as required by the IFB.[foot #] 3 We made this determination after concluding that the bids of all protesters had themselves been nonresponsive. We revised FAA's delegation of procurement authority (DPA) ordering termination of the award to IDP. In addition, we ordered FAA to evaluate the remaining bids, make award if possible, or if no bid was responsive, to complete the procurement through negotiation. RMTC, USI, FAA, and IDP filed timely requests for reconsideration of our decision. While these motions were pending, the United States Court of Appeals for the Federal ----------- FOOTNOTE BEGINS --------- [foot #] 2 The fact that FAA's waiver of a mandatory requirement for IDP's printer was disclosed during the earlier protests is not in dispute. In an affidavit in support of the instant motion for reconsideration, RMTC's president testified that it was not until the FAA program manager's testimony in the earlier protests "that [he] learned that IDP's printer did not meet the mandatory bid specifications." Affidavit of Jeffery P. Stollman (Stollman Affidavit) (May 3, 1990) 11; see also, Protester's Motion for Reconsideration at 2. [foot #] 3 We denied ISN's protest; ISN did not raise this ground of protest. ----------- FOOTNOTE ENDS ----------- 4 Circuit issued a decision holding that in a sealed bid procurement bidders whose bids were nonresponsive lacked standing to file a protest before this Board. International Business Machines Corp. v. United States, 892 F.2d 1006 (Fed. Cir. 1989). The Court directed that standing was to be determined as a threshold matter. Id. In light of this precedent, we granted reconsideration, and on February 21, 1990, vacated our decision terminating the award to IDP and dismissed the protests for lack of standing. On March 5, 1990, within ten days of our decision on reconsideration, LAPTOPS, which had submitted additional bids at higher prices than the winning bid of IDP, filed a protest claiming that the award to IDP violated statute and regulation, and requesting that we revise FAA's DPA to direct award to LAPTOPS. LAPTOPS, ETC., GSBCA 10526-P, 90-2 BCA 22,866, 1990 BPD 82.[foot #] 4 Specifically, LAPTOPS alleged in pertinent part: International Data Products (IDP), the current awardee of the instant contract does not meet the specifications of the IFB. In particular, the printer proposed by IDP does not conform to the requirement for IBM Proprinter emulation. This failure makes IDP's proposal non-responsive on its face. In addition,the printer proposed by IDP failed to pass the LTD for this same lack of emulation. In awarding this contract to a non-responsive bidder, the Government procurement procedure has violated the FAR statutes by making an arbitrary and capricious award to IDP. This claim has already been supported by a finding of the Board in GSBCA No. 10235. Complaint, 1-2. This protest was signed by the president of RMTC Systems on behalf of LAPTOPS. Id. However, since this individual was neither an attorney nor an employee of LAPTOPS, the Board refused to allow him to represent protester. See Order to Show Cause (Mar. 5, 1990); Conference Memorandum and Order on Further Proceedings (Mar. 6, 1990); Rule 6, 48 CFR 6101.6 (1989); Texas Carbon Ribbon, Inc., GSBCA 9905-P, 89-2 BCA 21,654, 1989 BPD 55. ----------- FOOTNOTE BEGINS --------- [foot #] 4 IDP's bid was the fifteenth lowest. LAPTOPS' remaining bids were the sixteenth, eighteenth, and nineteenth lowest. LAPTOPS alleged on information and belief that the seventeenth lowest bid was nonresponsive. ----------- FOOTNOTE ENDS ----------- 5 On March 7, 1990, LAPTOPS, represented by counsel, filed an amended protest complaint, in which it alleged in pertinent part: On November 22, 1989, this Board determined: (a) that the Panasonic KX-P1595 dot matrix printers bid by IDP do not comply with the solicitation requirement that the dot matrix printers emulate all of the control characters and escape sequences provided by the International Business Machines Corporation Proprinter XL; (b) that this noncompliance is not a minor informality or irregularity which may be waived under Federal Acquisition Regulation (FAR) 14.405, 48 C.F.R., ch. 1 (1988); and (c) that IDP's bid is thus nonresponsive to the terms of the solicitation. Rocky Mountain Trading Company - Systems Division, GSBCA No. 10235-P, 1989 BPD 364, at 23-24, 28-29. IDP timely moved for reconsideration of this decision, and on Wednesday, February 21, 1989, the Board issued its final decision on IDP's motion for reconsideration. Rocky Mountain Trading Company - Systems Division, GSBCA No. 10235-P-R (Feb. 21, 1990). As its grounds for protest, Laptops asserts the contracting officer's decision awarding the contract to IDP is in violation of statute and regulation, specifically 41 U.S.C. 253b(b) . . . and FAR 14.407-1(a)(3), 48 C.F.R., ch. 1 (1988) . . . . This amended protest is timely filed within ten working days after the date Laptops first learned of the basis for this protest, i.e., Wednesday, February 21, 1990, the date on which this Board made its final decision on IDP's motion for reconsideration. Rules 2(c), 5(b)(3)(ii), 48 C.F.R. 6101.2, 6101.5, 6101.19 (1988). Amended Complaint, V-VII. In dismissing LAPTOPS' protest, relying on its first protest complaint, we stated "[p]rotester does not contend that the nonresponsiveness of IDP's bid was unknown to it at [the date of the award]; it admits that the nonresponsiveness of IDP's printer was obvious from the face of IDP's bid." LAPTOPS, 90-2 BCA at 114,857, 1990 BPD 82, at 4. We found that this knowledge triggered the timeliness rules at the time of award, thus making LAPTOPS' protest untimely. On reconsideration, LAPTOPS contends that it did not know, and could not have known, that IDP's bid was nonresponsive at the time of award. Protester's Motion for Reconsideration. In support of the motion for reconsideration, LAPTOPS' president testified in an affidavit: 6 LAPTOPS did not known [sic] and could not reasonably have known, from the information provided on the bid of International Data Products, Inc. ("IDP") or from the contract, whether the items IDP bid would meet the requirements set forth in the IFB. LAPTOPS did not and does not know the capabilities of all the items bid by IDP and the other bidders in the instant protest. Moreover, many of the items bid in the instant solicitation could have been customized to meet the IFB requirements. The only way to determine for certain whether an item bid would have met the specifications would have been to test it. For example, it may have been possible to insert a ROM card into the printer IDP bid to make it emulate the IBM Proprinter XL. Second Affidavit of Edward C. Dow in Support of LAPTOPS, Etc.'s Motion for Reconsideration (Second Dow Affidavit) (Apr. 26, 1993) 5-6. Further, LAPTOPS admits that during discovery in the ISN, RMTC, and USI protests, it was revealed that IDP's printer could not meet a mandatory requirement in the IFB.[foot #] 5 Protester's Motion for Reconsideration at 2. RMTC's president testified in support of LAPTOPS' motion for reconsideration: 10. The fact that the IDP printer would not meet the bid specifications was also apparently unknown to the FAA from the face of the IDP bid. The FAA's program manager testified that the FAA first learned of this failure to meet specifications during the LTD: ----------- FOOTNOTE BEGINS --------- [foot #] 5 In the motion for reconsideration, LAPTOPS stated: During the course of discovery on those protests, it was determined that IDP's printer could not meet a mandatory requirement of the invitation for bids ("IFB"). Contrary to the representation made by IDP in its bid that its printer could satisfy these requirements, . . . during discovery it was revealed that IDP's printer failed the live test demonstration. Accordingly, an allegation relating to this failure was added to these protests. Protester's Motion for Reconsideration at 2. ----------- FOOTNOTE ENDS ----------- 7 Q: Is it a fact that the printer offered by IDP does not comply in all respects to paragraph C.3.2.T? A: The documentation provided in the bid indicates that it does meet all these requirements. A discrepancy was noted during the testing. Information Systems and Networks Corporation, et al., GSBCA No. 10228-P, November 22, 1989, at 23. 11. It was not until this testimony that I learned that IDP's printer did not meet the mandatory bid specifications. Stollman Affidavit 10-11.[foot #] 6 Discussion LAPTOPS's Motion for Reconsideration Reconsideration may be granted for any of the following reasons: (1) Newly discovered evidence which could not have been earlier discovered, even through due diligence; (2) Justifiable or excusable mistake, inadvertence, surprise, or neglect; . . . [or] (6) Any other ground justifying relief from the operation of the decision or order. Rule 33(a), 48 CFR 6101.33 (1991). LAPTOPS argues that the Board's conclusion that LAPTOPS should have known its basis of protest at the time of award is factually erroneous. LAPTOPS contends that we misconstrued its original protest complaint in reading that complaint to state the nonresponsiveness of IDP's bid was "obvious" on the face of the bid. Protester's Motion for Reconsideration at 5.[foot #] 7 LAPTOPS has submitted affidavits stating ----------- FOOTNOTE BEGINS --------- [foot #] 6 This testimony occurred during the merits hearing of the USI protest in October 1989. [foot #] 7 LAPTOPS also argues that we erred in considering its original complaint because LAPTOPS' amended protest complaint, which superseded the original, did not contain any (continued...) ----------- FOOTNOTE ENDS ----------- 8 that the failure of IDP's printer was not evident from the face of the bid and not revealed until discovery in the earlier protests. Based upon this new evidence, we accept LAPTOPS' assertion that LAPTOPS did not intend to admit that the nonresponsiveness of IDP's bid was evident from the face of the bid, as suggested in its first protest complaint which was drafted by a layman and later amended. See Second Dow Affidavit. Therefore, we grant LAPTOPS' motion for reconsideration. Rule 33(a)(1), (2), (6). Timeliness of LAPTOPS' Protest The burden of establishing that a protest is timely falls on the protester. D & R Office Machines Sales and Service, Inc., GSBCA 10311-P, 90-1 BCA 22,395, at 112,525, 1989 BPD 320, at 3 (citing Federal Systems Group, Inc., GSBCA 9394-P, 88-2 BCA 20,772, at 104,968, 1988 BPD 75, at 6). Our rules state that a protest not based on alleged improprieties in a solicitation must be filed "no later than 10 days after the basis for the protest is known or should have been known, whichever is earlier." Rule 5(b)(3)(ii), 48 CFR 6101.5 (1991) (emphasis added). The words "should have been known" in Board Rule 5(b)(3)(ii) impart a test of reasonableness. Cf. McIntyre v. United States, 789 F.2d 1408, 1411 (9th Cir. 1986) (construing "should have known" in 28 U.S.C. 2409a(f)). The "should have been known" language can be interpreted to impose constructive notice of adverse agency action on a potential protester. Chesney v. United States, 632 F. Supp. 867, 868-69 (D. Ariz. 1985); see also United States v. James Daniel Good Property, 971 F.2d 1376, 1381 (9th Cir. 1992), cert. granted, 113 S.Ct. 1576 (Mar. 22, 1993) (quoting $116,000 in U.S. Currency, 721 F. Supp. 701, 703-4 (D.N.J. 1989)) (under "knew or should have known" standard, an offense is discovered "where a 'party discovers or possesses the means to discover the alleged wrong, whichever occurs first.'"). LAPTOPS asserts that it "neither knew nor should have known the basis of its protest until February 22, 1990, when the Board vacated its decision ordering the FAA to evaluate LAPTOPS' bid." Protester's Motion for Reconsideration at 1.[foot #] 8 ----------- FOOTNOTE BEGINS --------- [foot #] 7 (...continued) language admitting that IDP's bid was nonresponsive on its face. Protester's Motion for Reconsideration at 5. [foot #] 8 While LAPTOPS may not have had actual knowledge of its basis of protest until February 1990, the individual who LAPTOPS authorized to file its protest, the president of RMTC, had actual knowledge of the basis of that protest several months (continued...) ----------- FOOTNOTE ENDS ----------- 9 While LAPTOPS' president testified that LAPTOPS did not and could not know that IDP's bid was nonresponsive from the face of IDP's bid, and did not actually know this until our decision on reconsideration, LAPTOPS has proffered no evidence on whether it "should have known" this when it was revealed during the earlier protests. See Second Dow Affidavit 5; Affidavit of Edward C. Dow in Support of LAPTOPS, Etc.'s Motion for Reconsideration (Dow Affidavit) (Apr. 13, 1990) 8. LAPTOPS admittedly received notice of the ISN, RMTC, and USI protests filed shortly after award and could have intervened in those protests. Moreover, LAPTOPS admits that the nonresponsiveness of IDP's bid was disclosed during discovery in the ISN, RMTC, and USI protests. Discovery in those protests occurred during September or October 1989, USI's merits hearing was conducted from October 12 until October 17, 1989, and the Board issued its decision on November 22, 1989, but LAPTOPS did not file its protest until March 5, 1990. The Board's timeliness rules do not permit a vendor to sit on the sidelines, "wait out" a protest proceeding, and then decide whether to raise a claim. Rather, as this Board has consistently recognized, the premise of Rule 5(b)(3)(ii) is the notion of due diligence. Cyber Digital, Inc., GSBCA 10249-P, 90-1 BCA 22,400, at 112,537, 1989 BPD 330, at 2; Control Corp., GSBCA 8524-P, 86-3 BCA 19,269, at 97,428, 1986 BPD 136, at 9 (citing Casey v. Merit Systems Protection Board, 748 F.2d 685, 686-87 (Fed. Cir. 1984)). Thus, a potential protester has a duty to inquire and cannot "'remain willfully ignorant of a thing readily ascertainable . . . when the means of knowledge is at hand.'" Amgems, Inc. v. F. R. Orr Construction Co., 617 F. Supp. 273, 278 (S.D. Fla. 1985) (quoting Sapp v. Warner, 105 Fla. 245, 141 So. 124 at 127 (1932)); accord, Jensen v. Snellings, 841 F.2d 600, 607 (5th Cir. 1988); Continental Airlines, Inc., B-246897.3, 92-1 CPD 105, at 2 (Jan. 22, 1992); J & J Maintenance, Inc. -- Recon., B-240799.4, B-240802.4, 91-1 CPD 364, at 3 (Apr. 10, 1991); Good Food Services, Inc., B-244528.3, 92-2 CPD 448, at 3 (Dec. 30, 1992). We conclude that regardless of LAPTOPS' inability to determine that IDP's bid was nonresponsive at the time of award, LAPTOPS should have known that IDP's printer failed the LTD when it was revealed in the ISN, RMTC, and USI ----------- FOOTNOTE BEGINS --------- [foot #] 8 (...continued) earlier in approximately October 1989, during the ISN, RMTC, and USI protest proceedings. Stollman Affidavit 10, 11. Given our decision in this case, we need not consider the effect, if any, of such knowledge. ----------- FOOTNOTE ENDS ----------- 10 protests.[foot #] 9 LAPTOPS' identical cause of action was pursued by RMTC and USI; the fact that they were determined to lack standing does not confer a right upon LAPTOPS to relitigate a cause of action which has become untimely. The Comptroller General has dismissed "follow-on" protests when a protester could have raised its ground of protest in an earlier protest, citing the policy against piecemeal resolution of protests. In so ruling in Techniarts Engineering, B-238520.5, B-238520.6, 92-1 CPD 20, at 3 (Dec. 31, 1991), the Comptroller General articulated a rationale which we find compelling here: Protesters and other parties to a protest are expected to exercise due diligence in presenting their respective positions; they may not present available information in a piecemeal fashion, either over the course of a single protest, American President Lines Ltd., B-236834.8; B-236834.9, May 15, 1991, 91-1 CPD 470, or through the filing of a separate protest after resolution of the first protest. See Source AV Inc., B-244755.2, B-244755.3, Sept. 10, 1991, 91-2 CPD 237; see generally J&J Maintenance, Inc.--Recon., B-240799.4; B-240802.4, Apr. 10, 1991, 91-1 CPD 364. . . . . Failure to make all arguments or submit all information available during the course of the initial protest undermines the goals of our bid protest forum to produce fair and equitable decisions based on consideration of both parties' arguments on a fully developed record.[[foot #] 10] Accord Source AV Inc., B-244755.2, B-244755.3, 91-2 CPD 237, at 2 (Sept. 10, 1991) ("As there is no apparent reason why Source AV could not have raised these issues when it filed its first protest, we consider these new protest grounds to be filed in a piecemeal manner . . . and we will not consider them."). ----------- FOOTNOTE BEGINS --------- [foot #] 9 At this juncture, in the interest of judicial economy, we do not reopen the record to pinpoint the earliest date on which the disclosure was made, given LAPTOPS' admission that it was disclosed during discovery. ISN, 90-1 BCA at ___ 112,938-9, 1989 BPD 364, at 27. [foot #] 10 The instant case is distinguishable from University Systems, Inc., GSBCA 11687-P, 92-2 BCA 24,938, 1992 _________________________ BPD 69 in which this Board allowed a new protest on a settlement agreement which resolved the initial protest; the settlement agreement could not have been previously litigated and raised a wholly new cause of action. ----------- FOOTNOTE ENDS ----------- 11 To permit a vendor that is next in line for award to await the outcome of a protest that sought to eliminate the only lower bidder which the agency considered to be responsive before prosecuting a claim which arose during that protest would subvert the purpose of the Board's rules on timeliness and intervention and promote wasteful, duplicative litigation. Such a process could lead to an endless stream of protests on the same procurement, contrary to the goals of economic and efficient procurement that underlie the Brooks Act. D & R Office Machines, 90-1 BCA at 112,525, 1989 BPD 320, at 3; 40 U.S.C. 759(f)(5)(A) (1988). As we stated in our original dismissal: The resolution of intervening litigation in which protester chose not to participate simply cannot serve to create a basis of protest. See Federal Data Corp. v. SMS Data Products Group, Inc., 819 F.2d 277, 279 (Fed. Cir. 1987) (questioning propriety of allowing party that neither protested nor intervened to raise objections to settlement agreement). LAPTOPS, 90-2 BCA at 114,857, 1990 BPD 82, at 4. We will thus not allow LAPTOPS to now assert the interest which it could have protected by participating in the initial protests. Our decision is supported by principles of finality embodied in the doctrines of res judicata and collateral estoppel. Cf. Amdahl Corp., GSBCA 7859-P, 85-2 BCA 18,111, at 90,932, 1985 BPD 18, at 17-18. In Amdahl, the Board refused to dismiss a protest because protester had "purposely bypassed an adequate opportunity to intervene" in a GAO protest, citing Provident Tradesman's Bank & Trust Co. v. Patterson, 390 U.S. 102, 114 (1968). However, in so ruling the Board noted that GAO's rules of procedure, unlike the Board's rules, neither authorized intervention of right nor permitted intervenors to participate fully as parties. Further, the Board in Amdahl recognized that precluding a would-be intervenor from relitigating an issue ". . . is a species of collateral estoppel that arises under Rules 19 (joinder) and 24 (intervention) of the Federal Rules of Civil Procedure." Amdahl Corp., 85-2 BCA at 90,932, 1985 BPD 18, at 17-18. In conclusion, we affirm our dismissal of LAPTOPS' protest as untimely filed because LAPTOPS should have known its basis of protest when it was disclosed during discovery in the ISN, RMTC, and USI protest proceedings. Decision LAPTOPS' motion for reconsideration is GRANTED; the Board's decision of March 30, 1990, dismissing LAPTOPS' protest as untimely filed is AFFIRMED. 12 MARY ELLEN COSTER WILLIAMS Board Judge We concur: VINCENT A. LaBELLA CATHERINE B. HYATT Board Judge Board Judge